Senex (ASX:SXY) share price up on new gas sale agreement

Senex Energy has announced it will sell 2.5 petajoules of natural gas to 29 Metals.

| More on:
two men in mining hats shake hands on a deal with gas pipelines in the background, indicating a deal between Senex and 29 Metals

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Senex Energy Ltd (ASX: SXY) share price is rising on Friday morning following news that the oil and gas producer will sell natural gas to 29 Metals Ltd (ASX: 29M).

At the time of writing, shares in Senex are trading for $3.56 – up 0.56%. The S&P/ASX 200 Index (ASX: XJO) is 0.06% lower.

Let’s take a closer look at today’s news.

The Senex share price is falling

In a statement to the ASX, Senex Energy says it has entered into an agreement with 29Metals to supply its Capricorn copper mine with 2.5 petajoules (PJ) of natural gas over 3 years.

The natural gas will be shipped to the Diamantina power station (which is owned by APA Group (ASX: APA)), which in turn will power the copper mine. The arrangement begins in January 2022.

The cost of the deal has not been disclosed, except to say it is a “fixed price” and “in line with current market prices”. According to the website Trading Economics, the current market price for natural gas is US$5.05 per million British thermal units. Its price has soared 98% since the beginning of the year.

Senex says it has about 80PJ of agreements with domestic customers at the moment.

Investors aren’t too enamoured with today’s news, judging by the falling Senex share price.

Management commentary

Senex Managing Director and CEO, Ian Davies, said:

The Capricorn Copper mine is a critical project in the Queensland Government’s Strategic Blueprint for the North West Minerals Province.

Copper in particular has a large role to play in the production and operation of next generation clean technologies such as electric vehicles, and solar and wind power sectors.

Senex looks forward to building another strong, long-term and mutually beneficial relationship that supports jobs, the economy and helps meet Australia’s energy demand as it transitions to a lower carbon future.

Senex share price snapshot

Over the past 12 months, the Senex share price has increased by 36%. Year to date it is up an even larger 41%. Both metrics are faster than the ASX 200 index over the same periods.

Senex Energy has a market capitalisation of roughly $655 million.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

a man sits on a rocket propelled office chair and flies high above a city
Energy Shares

Up 26% in a month, is the Paladin Energy share price on the comeback trail?

Will this rally stick for the ASX uranium share after a tough trading year to date?

Read more »

boy dressed as an eco warrior and holding a globe.
Energy Shares

Origin share price dips amid fresh climate pressure from shareholders

Shareholders are asking the company to put climate sensitivity analysis front and centre.

Read more »

share price ASX mining shares buy coal miner thumbs up
Energy Shares

Why are ASX coal shares having such a stellar end to the week?

It's proving a cracking end to the week for these three ASX 200 coal shares.

Read more »

share price ASX mining shares buy coal miner thumbs up
Record Highs

Why did the Whitehaven Coal share price just hit an 11-year high?

Whitehaven shares have been on fire in 2022.

Read more »

a miner wearing a hard hat smiles as he stands in front of heavy earth moving equipment on a barren mine site.
Energy Shares

Here’s why the Pure Hydrogen share price is soaring 22% today

Shares in the clean energy company are flying high on Wednesday.

Read more »

gas and oil worker on pipeline equipment
Energy Shares

ASX 200 energy shares mixed amid bearish oil price outlook

How did a bleak broker note affect energy shares today?

Read more »

A woman standing on a path flanked by big green trees is surrounded by colourful balloons tumbling from the sky.
Share Gainers

Why did the Pure Hydrogen share price pop 21% today?

Why did Pure Hydrogen shares have such an amazing day today?

Read more »

Two miners stand in front of a large black wall of coal.
Energy Shares

ASX coal shares in the spotlight amid fresh supply warnings

Could this be an opportunity for Australian coal company's.

Read more »